PITTSFIELD — Several aspects of the Berkshire economy floundered last year because of COVID-19, but the market for real estate soared.
Low interest rates, an exodus of people fleeing urban areas to rural settings because of COVID-19, and the realization that people could work just as productively remotely created a sales bonanza in the Berkshires last year.
The county’s entire real estate market rose 21 percent, with $794 million in total-dollar transactions last year, according to figures from the Berkshire County Board of Realtors, which tracks local Realtor-assisted transactions.
The dollar volume for single-family home sales increased by 60 percent in 2020 from the previous year, to $655 million, with 2,344 total sales, the highest number since the organization began tracking those numbers 26 years ago.
All indications are that the good times will continue to roll in the Berkshire residential housing market as the coronavirus pandemic subsides, although the county will continue to be hampered by a lack of inventory that also affected the market last year.
The dollar amount of transactions in residential homes so far during the first quarter of 2021 is up 51 percent, to almost $100 million, compared with $63 million at this time last year.
Sales of single-family homes in the Berkshires through January and February were up 20.9 percent from the same period last year, according to The Warren Group of Peabody, which tracks all state real estate transactions.
“This shows the demand for housing in 2021 remains high, yet, a lack of homes for sale will continue to be a challenge for buyers,” said Sandy Carroll, CEO of the Berkshire County Board of Realtors. The number of available single-family homes in the Berkshires has dropped from 640 in February 2020 to 239, she said.
“To continue the sales at this pace for the rest of 2021 is dependent upon new listings coming onto the market,” Carroll said. “The spring market is always busy, and potentially, those who own underused homes may see this as a prime time to sell.”
The hope is that the high demand for single-family homes in the Berkshires will cause homeowners who kept their properties off the market last year because of COVID-19 to decide to list them in the spring, Carroll said.
“I think as vaccinations start happening and people start feeling a little more comfortable about their health, they may be willing to put their homes on the market,” Carroll said.
“Also, people are looking at why the demand is so high. You might be looking at a home that you don’t use that often and decide it might be time to sell that home. There’s actually a big promotion going on right now in the Cape and Islands to consider selling or opening up that home to people who are seeking permanent housing.”
Nationally, home sales are expected to increase by about 10 percent this year, according to Lawrence Yun, chief economist and vice president of research at the National Association of Realtors. Mortgage rates are expected to remain, on average, at or near their historic low of 3 percent. Yun expects home prices to increase, but more moderately, which he sees as a “break for first-time homebuyers.”
In the Berkshires, the median sales price for single-family homes in February increased 12.3 percent on a year-over-year basis, to $210,000, according to The Warren Group, while the median year-to-date price has risen by 8.5 percent, to $227,750.
Yun expects the work-from-home pattern that was ushered in by the pandemic to continue to bolster home sales.
“During the pandemic, we learned that people who work in offices could be just as productive at home, and this new reality will help fuel home sales in the post-pandemic economy,” Yun wrote in his 2021 national housing forecast.
“Already, big tech companies are allowing greater work-from-home flexibility. Other organizations will no doubt follow in some hybrid fashion.”
“I think the pandemic showed how mobile people could be, and how there’s work-from-home options where you didn’t need to be physically present every day in a single location,” Carroll said. “I don’t think all of that has dialed back to pre-pandemic times.”